Leucadia to Acquire WilTel

NEW YORK -- Leucadia National Corporation (LUK - NYSE and PCX) and WilTel Communications Group, Inc. (WTEL - Nasdaq) announced today that Leucadia and the special committee of independent directors of WilTel reached an agreement in principle whereby WilTel will become a wholly owned subsidiary of Leucadia. Leucadia and WilTel intend to enter into a merger agreement that provides for a first-step exchange offer pursuant to which tendering WilTel stockholders will receive 0.4242 of a Leucadia common share for each share of WilTel common stock to be followed by a back-end merger for the same consideration as offered in the exchange offer. This exchange ratio represents a 50.3% premium to WilTel's stock price on May 14, 2003 ($10.60), the day before Leucadia announced its original proposal, and a 13.3% premium to WilTel's stock price based on the respective closing prices of the common stock of Leucadia ($37.56 per share) and WilTel ($14.06 per share) on August 11, 2003. At this exchange ratio, if all of the publicly held WilTel shares are acquired by Leucadia, the former public stockholders of WilTel would own approximately 15.8% of Leucadia. In addition, in the exchange offer and merger WilTel stockholders will receive contingent stock rights which entitle WilTel stockholders to additional Leucadia common shares if Leucadia sells substantially all of WilTel's assets prior to October 15, 2004 (which Leucadia has no plans to do) and the net proceeds exceed the price paid pursuant to this transaction. The special committee was advised by J.P. Morgan Securities. Consummation of this transaction is subject to the negotiation and execution of a definitive agreement, certain regulatory approvals and a non-waivable condition that the holders of at least a majority of the WilTel shares that are not beneficially owned by Leucadia and its affiliates have tendered and not withdrawn their shares in the exchange offer, as well as other customary conditions. WilTel Communications Group Inc.